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CommScope Announces First Quarter 2010 Results

Operating loss of $6 million due to previously announced restructuring
actions

Adjusted operating income of $66 million, excluding special items

Net loss of $22 million, or a loss of $0.23 per share

Adjusted net income of $25 million, or $0.26 per diluted share

CommScope Inc., a global leader in infrastructure solutions for
communications networks, reported sales of $721.6 million and a net loss
of $22.1 million, or a loss of $0.23 per share, for the quarter ended
March 31, 2010.

The reported net loss includes after-tax charges of $29.9 million in
restructuring costs, $15.2 million for the amortization of purchased
intangibles as well as a tax charge of $2.3 million resulting from the
recently passed U.S. health care legislation. Excluding these special
items, adjusted first quarter 2010 earnings were $25.3 million, or $0.26
of earnings per diluted share. (A reconciliation of reported GAAP
results to adjusted results is attached).

For the quarter ended March 31, 2009, CommScope reported sales of $742.3
million and a net loss of $20.5 million, or a loss of $0.29 per share.
The reported net loss included after-tax charges of $15.3 million for
the amortization of purchased intangibles, $8.6 million for the loss on
debt conversions and $7.6 million in restructuring and other special
items. Excluding these special items, adjusted first quarter 2009
earnings were $11.0 million, or $0.14 of earnings per diluted share.

“Despite a slow start to the year, orders and sales strengthened
considerably as we moved through the first quarter,” said CommScope
Chairman and Chief Executive Officer Frank Drendel. “We recorded the
strongest book-to-bill ratio we have seen in the last few years and
believe we are well positioned to benefit from strengthening capital
spending by North American wireless carriers.

“The rapid adoption of smart phones and other sophisticated wireless
communications devices is helping to create a compelling mobile
broadband experience. The ongoing need for bandwidth also continues to
drive increased investment by business enterprises in data centers and
‘intelligent’ buildings as applications like high definition video and
cloud computing are more commonly deployed.”

Sales Overview

First quarter 2010 sales declined 3.6 percent sequentially and 2.8
percent year over year to $721.6 million. A significant increase in
Enterprise segment sales was more than offset by lower sales in the
Antenna, Cable and Cabinet Group (ACCG) segment. Foreign exchange rates
positively affected sales by $15.9 million year over year and negatively
affected sales by $5.2 million on a sequential basis, primarily in the
ACCG segment.

Net Sales by Segment

($ in millions)

First

First

Fourth

Quarter

Quarter

Quarter

% Change

2010

2009

2009

YOY

Sequential

ACCG

$

258.6

$

325.9

$

311.9

-20.7

%

-17.1

%

Enterprise

197.9

144.0

174.7

37.4

%

13.3

%

Broadband

111.0

114.2

103.8

-2.8

%

6.9

%

WNS

155.8

159.0

158.7

-2.0

%

-1.8

%

Inter-segment eliminations

(1.7

)

(0.8

)

(0.6

)

n/a

n/a

Total CommScope Net Sales

$

721.6

$

742.3

$

748.5

-2.8

%

-3.6

%

Net Sales by Region

($ in millions)

First

First

Fourth

Quarter

Quarter

Quarter

% Change

2010

2009

2009

YOY

Sequential

United States

$

383.1

$

359.6

$

378.7

6.5

%

1.2

%

Europe, Middle East & Africa

149.2

176.3

160.6

-15.4

%

-7.1

%

Asia Pacific

123.6

146.5

156.0

-15.6

%

-20.8

%

Other Americas

67.4

60.7

53.8

11.0

%

25.3

%

Subtotal International

$

340.2

$

383.5

$

370.4

-11.3

%

-8.2

%

Inter-segment eliminations

(1.7

)

(0.8

)

(0.6

)

n/a

n/a

Total CommScope Net Sales

$

721.6

$

742.3

$

748.5

-2.8

%

-3.6

%

ACCG segment sales declined primarily due to lower capital spending by
customers in the Asia Pacific (APAC) and Europe, Middle East and Africa
(EMEA) regions. Lower APAC sales were driven by regulatory issues in
India and reduced capital spending levels by wireless service providers
in China. Sales of the company’s antenna and cable products were also
negatively affected by conservative capital deployment by European
wireless operators. The ACCG segment ended the first quarter with strong
order input and generated an above corporate average book-to-bill ratio.

Enterprise segment sales increased significantly as many corporations
and other large entities resumed investing in strategic information
technology including data centers and other infrastructure. Sales
increased across all regions and essentially all product groups. The
company continues to see robust opportunities in the technology, U.S.
federal government, healthcare and education markets.

Broadband segment sales declined slightly year over year, primarily as a
result of a reduction in pricing on cable products in the North American
market. This overall decline was partially offset by higher sales in the
Central and Latin America region.

Wireless Network Solutions (WNS) segment sales declined slightly
primarily due to the timing of various projects in the EMEA and North
American regions. However, the company continues to see positive trends
in the project-oriented WNS segment, particularly for capacity and
coverage solutions for buildings, stadiums, trains and other challenging
applications as well as location-based services.

In the first quarter of 2010, U.S. sales increased 6.5 percent year over
year to $383.1 million, or 53 percent of total company sales.

Orders booked in the first quarter of 2010 were $791.9 million for a
book-to-bill ratio of 1.10x, which is the strongest quarterly ratio
reported in several years.

Operating Overview

The company reported an operating loss of $6.2 million in the first
quarter of 2010 due to charges of $47.9 million on previously announced
restructuring. The company reported operating income of $9.0 million in
the year-ago quarter.

Adjusted operating income, which excludes special items such as
restructuring and the amortization of purchased intangible assets, rose
45.9 percent from the year ago quarter to $66.1 million. Adjusted
operating income increased primarily due to strengthening Enterprise
segment profitability, benefits from cost reduction initiatives
implemented in 2009 and improved factory utilization. (A reconciliation
of GAAP to adjusted operating income follows.)

First Quarter 2010 Adjusted (non-GAAP) Operating Income by Segment

ACCG

Enterprise

Broadband

WNS

Total

Operating income (loss), as reported

$

(40.3

)

$

18.1

$

13.3

$

2.7

$

(6.2

)

Amortization of purchased intangible assets (1)

17.1

1.6

0.5

5.2

24.4

Restructuring costs

31.6

15.7

-

0.6

47.9

Adjusted (non-GAAP) operating income

$

8.4

$

35.4

$

13.8

$

8.5

$

66.1

Adjusted (non-GAAP) operating margin

3.2

%

17.9

%

12.4

%

5.5

%

9.2

%

Fourth Quarter 2009 Adjusted (non-GAAP) Operating Income by
Segment

ACCG

Enterprise

Broadband

WNS

Total

Operating income, as reported

$

13.7

$

27.6

$

12.6

$

19.3

$

73.2

Amortization of purchased intangible assets (1)

19.1

1.6

0.5

5.2

26.4

Restructuring costs

0.4

0.1

0.1

-

0.6

Adjusted (non-GAAP) operating income

$

33.2

$

29.3

$

13.2

$

24.5

$

100.2

Adjusted (non-GAAP) operating margin

10.6

%

16.8

%

12.7

%

15.4

%

13.4

%

First Quarter 2009 Adjusted (non-GAAP) Operating Income by Segment

ACCG

Enterprise

Broadband

WNS

Total

Operating income (loss), as reported

$

(13.4

)

$

7.4

$

8.6

$

6.4

$

9.0

Amortization of purchased intangible assets (1)

17.2

1.6

0.5

5.2

24.5

Restructuring costs

1.6

1.2

3.8

2.1

8.7

Litigation charge

-

-

-

3.1

3.1

Adjusted (non-GAAP) operating income

$

5.4

$

10.2

$

12.9

$

16.8

$

45.3

Adjusted (non-GAAP) operating margin

1.7

%

7.1

%

11.3

%

10.6

%

6.1

%

(1) Includes amortization included in cost of sales

CommScope management believes that presenting operating income
information excluding the special items noted above provides meaningful
information to investors in understanding operating results and may
enhance investors' ability to analyze financial and business trends,
when considered together with the GAAP financial measures. In addition,
CommScope management believes that these non-GAAP financial measures
allow investors to compare period to period more easily by excluding
items that could have a disproportionately negative or positive impact
on results in any particular period.

First Quarter 2010 Financial Highlights

Gross margin for the first quarter of 2010 was 28.4 percent and
includes $3.6 million of amortization of purchased intangibles in cost
of sales. Gross margin for the year-ago period was 22.7 percent.

SG&A expense for the first quarter of 2010 was $112.6 million, up
$11.4 million or 11.2 percent year over year primarily due to the
reinstatement of certain incentive based employee cash bonus programs
in 2010 that had been suspended for 2009.

Interest expense declined 19.9 percent year over year to $24.5 million
primarily due to lower outstanding debt balances.

The income tax benefit for the quarter includes a $2.3 million charge
related to changes to the deductibility of prescription drug benefits
to certain retirees (Medicare Part D) made as part of the U.S. health
care reform legislation enacted in March 2010. Excluding this charge
and other special items, the effective tax rate on adjusted pretax
income was 42.8 percent.

Total depreciation and amortization expense in the first quarter was
$48.2 million, which included $24.4 million of amortization of
purchased intangibles.

Net operating cash flow in the quarter was $63.3 million.

Total debt outstanding declined $136.6 million during the first
quarter of 2010.

Other Highlights

CommScope Enterprise Solutions introduced the Wired for Wireless™
Solution, which provides building owners and developers the necessary
foundation to ensure exceptional wireless coverage throughout a
building’s lifecycle. This cost-effective innovation builds upon
CommScope’s enterprise structured cabling expertise and its Andrew®
brand of wireless products. The Wired for Wireless Solution is part of
the company’s total in-building wireless portfolio, which includes
fiber distributed antenna systems, repeater platforms, radiating
cables and other coverage solutions.

ZTE Corporation recently honored CommScope’s Andrew Solutions with its
2009 Best Partner award, a distinction Andrew has now won for the
fourth consecutive year. Andrew’s history of providing advanced
wireless infrastructure solutions in China began in the early 1970s
and has led to the establishment of solid, long-term cooperative
relationships with the major Chinese carriers and OEMs.

Newton, NC: Relocate wireless cable production to another CommScope
facility in North America

Westerville, OH: Relocate research and development operations to other
CommScope facilities in North America

During the first quarter of 2010, CommScope recognized $48.0 million of
costs related to these actions, including $32.8 million for severance,
an $8.9 million charge for asset impairment and a $6.3 million net
curtailment loss related to pension and other postretirement benefits.
CommScope expects to recognize additional charges of $8 million to $13
million by the end of 2011 to complete these initiatives.

CommScope expects total annualized savings of $25 million to $30 million
once the initiatives are completed in late 2011. Approximately half of
these annualized savings are expected to be realized in 2011, primarily
in the second half of the year.

Outlook

CommScope management provided the following guidance for the second
quarter of 2010:

Revenue of $800 million to $850 million

Adjusted operating income of $90 million to $110 million, excluding
amortization of purchased intangibles, restructuring and other special
items

Tax rate of 32 percent to 36 percent on adjusted pretax income

“We are pleased that our first quarter adjusted operating results showed
year over year improvement despite a slow start in sales for the year,”
said Executive Vice President and Chief Financial Officer Jearld
Leonhardt. “Looking ahead, we are encouraged by prospects for continued
economic growth and strengthening North American wireless capital
spending. We expect strong improvement in second quarter sales and
adjusted operating income, excluding restructuring and any other special
items.

“Our second quarter 2010 guidance is based upon expectations of an
improving global economy and increasing North American wireless capital
spending. However, we also expect higher material costs and some
supply-chain constraints. We are currently facing long lead times for
certain components that could restrain our second quarter growth.

“While cost trends may make margin expansion more challenging, we
continue to expect growth in calendar year 2010 sales and adjusted
operating income, excluding special items. We believe our performance
will be stronger in the second half of the year as we improve
operational efficiency and enhance our competitive position in new and
existing markets.”

Conference Call Information

CommScope plans to host a call today at 5:00 p.m. ET to discuss first
quarter results. You are invited to download slides of the presentation
from the Investor Relations page of CommScope’s website and listen to
the conference call or live webcast with Frank Drendel, chairman and
CEO; Eddie Edwards, president and COO; and Jearld Leonhardt, executive
vice president and CFO.

To participate in the conference call, U.S. callers should dial +1
866-845-6585 and callers outside of the U.S. should dial +1
706-643-2944. The conference identification number is 69374075. Please
plan to dial in 10 – 15 minutes before the start of the call to
facilitate a timely connection. The live, listen-only audio of the call
will be available through a link on the Investor Relations page of
CommScope’s website at www.commscope.com.

If you are unable to participate in the call and would like to hear a
replay, U.S. callers can dial +1 800-642-1687 and callers outside the
U.S. can dial +1 706-645-9291 for the replay. The replay identification
number is 69374075 and will be available through May 13, 2010. A webcast
replay will also be archived on CommScope’s website for a limited period
of time following the conference call.

About CommScope

CommScope,
Inc. (NYSE: CTV – www.commscope.com)
is a world leader in infrastructure solutions for communication
networks. Through its Andrew
Solutions™ brand, it is a global leader in radio frequency subsystem
solutions for wireless networks. Through its SYSTIMAX®
and Uniprise®
brands, CommScope is a world leader in network infrastructure solutions,
delivering a complete end-to-end physical layer solution, including
cables and connectivity, enclosures, intelligent software and network
design services, for business enterprise applications. CommScope also is
the premier manufacturer of coaxial cable for broadband
cable television networks and one of the leading North American
providers of environmentally secure cabinets
for DSL and FTTN applications. Backed by strong research and
development, CommScope combines technical expertise and proprietary
technology with global manufacturing capability to provide customers
with infrastructure solutions for evolving global communications
networks in more than 100 countries around the world.

Forward Looking Statement

This press release contains forward-looking statements regarding, among
other things, the business position, plans, outlook, integration, and
other financial items relating to CommScope that are based on
information currently available to management, management's beliefs and
a number of assumptions concerning future events. Statements made in the
future tense, and statements using words such as "expect," "believe,"
"intend," "goal," "estimate," "project," "plans," "anticipate,"
"designed to," "confident," "think," "scheduled," "outlook," "guidance,"
"foreseeable future" and similar expressions are intended to identify
forward-looking statements. Forward-looking statements are not a
guarantee of performance and are subject to a number of risks and
uncertainties, many of which are difficult to predict and are beyond the
control of CommScope, and therefore should be carefully considered.
Factors that could cause actual results of CommScope to differ
materially include, but are not limited to, continued global economic
weakness and uncertainties and disruption in the credit and financial
markets; changes in cost and availability of key raw materials and the
potential effect on customer pricing; delays or challenges related to
removing, transporting or reinstalling equipment; the ability to retain
qualified employees; customer demand for our products and the ability to
maintain existing business alliances with key customers or distributors;
competitive pricing and acceptance of products; industry competition and
the ability to retain customers through product innovation;
concentration of sales among a limited number of customers or
distributors; customer bankruptcy; the risk that internal production
capacity and that of contract manufacturers may be insufficient to meet
customer demand or quality standards for our products; the risk that
customers might cancel orders placed or that orders currently placed may
affect order levels in the future; continuing consolidation among
customers; possible production disruption due to supplier or contract
manufacturer bankruptcy, reorganization or restructuring; successful
ongoing operation of our vertical integration activities; the
possibility of further restructuring actions; possible future impairment
charges for fixed or intangible assets, including goodwill; increased
obligations under employee benefit plans; significant international
operations and the impact of variability in foreign exchange rates;
ability to fully realize anticipated benefits from prior or future
acquisitions or equity investments; substantial indebtedness and
maintaining compliance with debt covenants; capital structure changes;
income tax rate variability and ability to recover amounts recorded as
value added tax receivables; changes in tax laws or regulations; product
performance issues and associated warranty claims; ability to
successfully implement major systems initiatives; realignment of global
manufacturing capacity; cost of protecting or defending intellectual
property; ability to obtain capital on commercially reasonable terms;
adequacy and availability of insurance; costs and challenges of
compliance with domestic and foreign environmental laws and the effects
of climate change; fluctuations in interest rates; the ability to
achieve expected sales growth and earnings goals; the outcome of pending
and future litigations and proceedings; U.S. health care law changes;
authoritative changes in generally accepted accounting principles by
standard-setting bodies; political instability; and regulatory changes
affecting us or the industries we serve. For a more complete description
of factors that could cause such a difference, please see CommScope's
filings with the Securities and Exchange Commission (SEC), which are
available on CommScope's website or at www.sec.gov.
In providing forward-looking statements CommScope does not undertake any
duty or obligation to update these statements as a result of new
information, future events or otherwise.

CommScope, Inc.

Condensed Consolidated Statements of Operations

(Unaudited -- In thousands, except per share amounts)

Three Months Ended

March 31,

2010

2009

Net sales

$

721,606

$

742,251

Operating costs and expenses:

Cost of sales

516,765

573,526

Selling, general and administrative

112,585

101,205

Research and development

29,808

28,962

Amortization of purchased intangible assets

20,764

20,824

Restructuring costs

47,852

8,703

Total operating costs and expenses

727,774

733,220

Operating (loss) income

(6,168

)

9,031

Other income (expense), net

1,252

(10,030

)

Interest expense

(24,530

)

(30,627

)

Interest income

1,477

1,479

Loss before income taxes

(27,969

)

(30,147

)

Income tax benefit

5,853

9,625

Net loss

$

(22,116

)

$

(20,522

)

Loss per share:

Basic

$

(0.23

)

$

(0.29

)

Diluted (a)

$

(0.23

)

$

(0.29

)

Weighted average shares outstanding:

Basic

94,295

71,800

Diluted (a)

94,295

71,800

(a) The calculation of diluted loss per share for the three months ended
March 31, 2010 excludes the dilutive effect of stock options (0.6
million shares), restricted stock units and performance share units (0.8
million shares), and convertible debt (10.5 million shares) because they
would have decreased the loss per share. The calculation of diluted loss
per share for the three months ended March 31, 2009 excludes the
dilutive effect of stock options (0.1 million shares), restricted stock
units and performance share units (0.4 million shares), and convertible
debt (8.9 million shares) because they would have decreased the loss per
share. Out-of-the-money options to purchase 1.4 million and 2.5 million
shares were excluded from the computation of diluted loss per share for
the three months ended March 31, 2010 and 2009, respectively, because
they would have been antidilutive.

See notes to unaudited condensed consolidated financial statements
included in our Form 10-Q.

CommScope, Inc.

Condensed Consolidated Balance Sheets

(Unaudited -- In thousands, except share amounts)

March 31,

December 31,

2010

2009

Assets

Cash and cash equivalents

$

561,604

$

662,440

Short-term investments

60,294

40,465

Total cash, cash equivalents and short-term investments

621,898

702,905

Accounts receivable, less allowance for doubtful accounts of

$17,239 and $16,572, respectively

608,686

598,959

Inventories, net

340,910

314,047

Prepaid expenses and other current assets

53,830

61,435

Deferred income taxes

80,830

67,610

Total current assets

1,706,154

1,744,956

Property, plant and equipment, net

381,668

412,388

Goodwill

995,023

995,037

Other intangibles, net

696,996

721,390

Other noncurrent assets

68,249

67,545

Total Assets

$

3,848,090

$

3,941,316

Liabilities and Stockholders' Equity

Accounts payable

$

236,219

$

200,869

Other accrued liabilities

287,932

247,447

Current portion of long-term debt

11,874

140,810

Total current liabilities

536,025

589,126

Long-term debt

1,396,036

1,403,668

Deferred income taxes

123,081

143,132

Pension and other postretirement benefit liabilities

152,086

134,770

Other noncurrent liabilities

119,619

121,637

Total Liabilities

2,326,847

2,392,333

Commitments and contingencies

Stockholders' Equity:

Common stock, $.01 par value; Authorized shares: 300,000,000;

Issued and outstanding shares: 94,393,464 at March 31, 2010

and 94,217,797 at December 31, 2009

1,047

1,046

Additional paid-in capital

1,370,371

1,361,156

Retained earnings

372,768

394,884

Accumulated other comprehensive income (loss)

(73,214

)

(58,434

)

Treasury stock, at cost: 10,350,516 shares at March 31, 2010 and

and 10,348,195 shares at December 31, 2009

(149,729

)

(149,669

)

Total Stockholders' Equity

1,521,243

1,548,983

Total Liabilities and Stockholders' Equity

$

3,848,090

$

3,941,316

See notes to unaudited condensed consolidated financial statements
included in our Form 10-Q.

CommScope, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited -- In thousands)

Three Months Ended

March 31,

2010

2009

Operating Activities:

Net loss

$

(22,116

)

$

(20,522

)

Adjustments to reconcile net loss to net cash provided by

operating activities:

Depreciation and amortization

48,205

50,003

Equity-based compensation

8,917

3,547

Deferred income taxes

(27,840

)

(19,944

)

Non-cash restructuring charges

15,274

—

Loss on conversion of debt securities

—

8,649

Changes in assets and liabilities

40,901

63,631

Net cash provided by operating activities

63,341

85,364

Investing Activities:

Additions to property, plant and equipment

(8,752

)

(13,825

)

Proceeds from disposal of property, plant and equipment

6,619

371

Net purchases of short-term investments

(19,829

)

—

Cash paid for acquisitions

—

(84

)

Net cash used in investing activities

(21,962

)

(13,538

)

Financing Activities:

Principal payments on long-term debt

(136,158

)

(356,736

)

Proceeds from the issuance of long-term debt

—

100,000

Net borrowings under revolving credit facility

—

75,000

Other financing activities

272

(2,143

)

Net cash used in financing activities

(135,886

)

(183,879

)

Effect of exchange rate changes on cash

(6,329

)

(9,305

)

Change in cash and cash equivalents

(100,836

)

(121,358

)

Cash and cash equivalents, beginning of period

662,440

412,111

Cash and cash equivalents, end of period

$

561,604

$

290,753

See notes to unaudited condensed consolidated financial statements
included in our Form 10-Q.

CommScope, Inc.

Net Sales and Operating Income (Loss) by Reportable Segment

(Unaudited -- In millions)

Three Months Ended

March 31,

2010

2009

Net Sales:

ACCG

$

258.6

$

325.9

Enterprise

197.9

144.0

Broadband

111.0

114.2

WNS

155.8

159.0

Inter-segment eliminations

(1.7

)

(0.8

)

Consolidated Net Sales

$

721.6

$

742.3

Operating Income (Loss):

ACCG

$

(40.3

)

$

(13.4

)

Enterprise

18.1

7.4

Broadband

13.3

8.6

WNS

2.7

6.4

Consolidated Operating Income (Loss)

$

(6.2

)

$

9.0

CommScope, Inc.

Reconciliation of GAAP Measures to Adjusted (Non-GAAP) Measures

(Unaudited -- In millions, except per share amounts)

Three Months Ended

March 31, 2010

Operating Income (Loss)

Net Income (Loss) (1)

Diluted EPS

As reported

$

(6.2

)

$

(22.1

)

$

(0.23

)

Special items:

Amortization of purchased intangible assets (2)

24.4

15.2

0.16

Restructuring costs

47.9

29.9

0.31

Tax effect of health care legislation

-

2.3

0.02

As adjusted for special items (non-GAAP)

$

66.1

$

25.3

$

0.26

Three Months Ended

March 31, 2009

Operating Income

Net Income (Loss) (1)

Diluted EPS

As reported

$

9.0

$

(20.5

)

$

(0.29

)

Special items:

Amortization of purchased intangible assets (2)

24.5

15.3

0.20

Restructuring costs

8.7

5.6

0.08

Litigation charge

3.1

2.0

0.03

Loss on debt conversions

-

8.6

0.12

As adjusted for special items (non-GAAP)

$

45.3

$

11.0

$

0.14

(1) The tax rates applied to special items reflect the tax expense or
benefit expected to be realized based on the tax jurisdiction of the
entity generating the special item. There are certain special items for
which we expect to receive little or no tax benefit.

(2) Includes amortization included in cost of sales

CommScope management believes that presenting operating income, net
income (loss) and diluted EPS information excluding the special items
noted above provides meaningful information to investors in
understanding operating results and may enhance investors' ability to
analyze financial and business trends, when considered together with the
GAAP financial measures. In addition, CommScope management believes that
these non-GAAP financial measures allow investors to compare period to
period more easily by excluding items that could have a
disproportionately negative or positive impact on results in any
particular period.